Kinross Gold Corp. is spending more than $800 million to essentially tread water as — like many miners — it faces a future in which new gold assets are increasingly difficult to find and costly to develop.
The Canadian miner said Monday it will move ahead with expansions at mines in Mauritania and Nevada as part of efforts to maintain its production and lower costs.
“I don’t look at it as standing still,” Chief Executive Officer Paul Rollinson said Monday in an interview with Bloomberg Television. “Top line production will be similar but the cash flow that’s coming out of this asset will be dramatically different.”
Construction for the Phase Two expansion of the Tasiast mine in Mauritania will begin early next year, Toronto-based Kinross said in a statement. The company also intends to re-invest in its Round Mountain mine in Nevada to extend its life by five years. Together, the two investments should stabilize Kinross’s global production at about 2.5 million ounces a year, Rollinson said.
Around the world, gold miners have been scrambling to secure new production as existing mines approach the end of their lives. But with the low-hanging fruit already picked, and gold prices still far below the lofty heights seen five years ago, securing profitable new production is a struggle. Some in the industry believe output may not increase for years.
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